There may be some common errors and difficulties in decision making. Managers need to avoid these errors and difficulties so as to increase the decision quality and improve the end results. There are two types of decision makings i.e. individual decision making and group decision making. Their brief introduction and ideas for improving quality of decision making are given below:
a) Improving Individual Decision Making
Individuals think and reason before they act. Under some decision situations, people follow the rational decision making model. But for most people, and for most non-routine decisions, this is probably more the exception than the rule. Few important decisions are simple or unambiguous enough for rational model's assumptions to apply. So, individuals look for solutions that satisfy rather than optimize injecting biases and prejudices into the decision process, and relying on intuition. For the quality improvement in individual decision making, following points can be taken for the considerations.
1. Analyze the situation
Adjust our decision making style to the different situations in which you are operating and to the criteria your organization evaluates and rewards.
2. Be aware of biases and prejudices
We all bring biases to the decisions we make. If you understand the biases influencing your judgment you can begin to change the way you make decisions to reduce those biases.
3. Combined rational analysis with intuition
Rational analysis and intuition are not conflicting approaches to decision making. By using both, you can actually improve your decision making effectiveness. As you gain managerial experience, you should feel increasingly confident in imposing your intuitive processes on the top of your rational analysis.
4. Don't assume that your specific decision style is appropriate for every job
Your effectiveness as a decision maker will increase if you match your decision style to the requirements of the job. For example, if your decision making style is directive, you will be more effective working with people whose jobs require quick actions. Similarly, an analytic style on the other hand, would work well managing accountants, market researchers, or financial analysts.
5. Try to enhance your creativity
Openly or clearly look for novel solutions to the problems in new ways and use analogies. Additionally, try to remove work and organizational barriers that might hamper your creativity.
6. Others
Increase information inputs, proper communication, select appropriate timing, increase acceptance and commitment, create supportive environment, change personal negative habits and attitudes, proper reward and punishment system, calculate risk and return etc. for improving quality of individual decision making.
b) Improving Group Decision Making
Inspite of problems in group decision making, there are ways to minimize the effect of time constraint, groupthink, group polarization and conformity to peer pressures. Participation, communication, free flow of information, changes of interaction and respect for each individual member in the group are the main factors that lead to improved decision making. Below presented are some important techniques frequently used by organizations in making effective group decisions.
1. Interacting Group
Interacting groups are formally created to take a decision on a specific task. In these groups, members meet face to face and rely on both verbal and non-verbal interaction to communicate with each other. Interacting groups often censor themselves and pressure individual members toward the conformity of an opinion. It is the traditional but most common form of group decision making technique.
2. Brainstorming
It is one of the most popular forms of interactive group decisions. Under this technique, group members are free to generate different ideas and alternatives to solve novel problems. In other words, interaction is free and open and finally with the accumulation of pooled information and derived judgments, consensus is achieved. It is thus, an interpersonal free exchange and sharing of ideas converted into decision. It is applied during idea generation phase of decision making. Alex Osborn (1953) introduced the concept of brainstorming for the selection of different courses of action. There are different rules for brainstorming which are as follows:
- Do not criticize ideas: Members are not allowed to criticize the ideas given by their colleagues during brainstorming.
- Provide as many ideas as possible: Another rule for brainstorming is collection of ideas from as many members as possible. All the presented ideas are noted down for further discussion.
- Speak freely: Every member is free to put ideas no matter how wild they are. The only thing is that ideas are presented without any sort of hesitation.
- Build on the ideas of others: Members should build on the different ideas provided by group members. This is the synergy process where ideas are to be modified and simplified by adding others' ideas.
3. Nominal Group Technique
The nominal group technique (NGT) was developed to gain the benefits of group participation. This is a structured technique for making decisions where members are invited and familiarized with problems or issues to be solved. Using this technique, members carefully listen and study the problems and they are given 5 to 10 minutes of time to work independently to generate and write down their ideas. Then they describe and clarify their ideas to other group members. To reach in an agreement, there will be voting.
4. Electronic Meeting
It is the group decision making technique designed to help decision-making in groups to reach a decision through an interactive, computer based system allowing members for anonymity of comments and aggregation of votes. Issues are presented to the participants and they type their responses onto their computer screen. Individual comments as well as aggregate votes are displayed on a projection screen in the room.
The major advantages of electronic meetings are anonymity, parallel communication, honesty and speed. Participants can anonymously type any message they want and it flashes on the screen for all to see at the push of participant's keyboard. It allows people to be brutally honest without penalty. And it is fast because chitchat is eliminated, discussions are not digressed and many participants can talk at once without stepping on one another's toe. The future of group meetings undoubtedly will include extensive use of this technology.
5. The Delphi Technique
This technique was originally developed by Rand Corporation in the late 1940s to predict the demand for manpower in the organization. Using this technique, a series of questionnaires is distributed among experts for filling in who work independently and avoid any sort of face to face discussions. An intermediary establishes contracts with these experts and accumulated questionnaires. The main jobs of the intermediary are to collect and summarize responses along with the follow-up questionnaires. The panel members again send back their responses. This cycle is repeated until a convergence is reached for with final decision making.
Delphi Process or Steps
Step 1: A series of questionnaire is distributed among experts for filling solution independently.
Step 2: An intermediary establishes contracts and accumulates questionnaires from experts.
Step 3: Intermediary summarizes the responses and gives feedback to the panel of experts.
Step 4: New follow-up questionnaires are prepared and distributed again.
Step 5: Panel of experts again send back their responses.
Step 6: Same process is repeated again and again until consensus is reached.
6. The Step Ladder Technique
This technique of decision making is effective to reduce the potential inhibiting effects of face to face meeting in group. Under this technique, group members are added one by one at each stage of decision making process so that their input is fresh and clear by the previous discussed point of view. The steps involved in this process are as follows:
Step 1: Two individuals (eg. A and B) are given the same problem to come up with the solutions. They work independently and bring an independent solution to the problem.
Step 2: Both A and B sit together and develop solution to the problem and meet with another member (eg. C) who had independently analyzed the problem and arrived at a decision point.
Step 3: A, B and C meet to discuss on the problem and arrive at a consensus decision, and they are again joined by another member (eg. D), who has independently analyzed the problem and arrived at a decision.
Step 4: A, B, C and D sit together, discuss on different solutions and make the final decision.
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